Analysis of the Core and Periphery Markets in the Fast Food Industry in Relation to Labour Market Segmentation The fast food industry has become increasingly popular due to the convenience and time efficient meal options that it provides. In 1986 there were 126, 125 fast food establishments in the United States of America and that number has certainly increased (Brown, 1990). Therefore it is no surprise that the fast food industry employs many individuals in various sectors in order to succeed in a capitalistic economy and that segmentation of employees into different markets of jobs is necessary (Parcel and Sickmeier, 1988). Labour market segmentation is the idea that society does not contain a single, open market into which everyone is allowed equal entry, based on the human capital theory.(Nelson) However it hypothesizes that the labour market contains a primary market, containing the good jobs and a secondary labour market containing the bad jobs (Krahn, Lowe and Hughes, 133). Individuals are given preferential entry into labour markets based on factors independent of just their human capital, such as gender, ethnicity and availability of jobs. An example being that women, youth and foreigners are commonly given entry into secondary labour markets which hold poor quality jobs with low chances of advancement to higher quality positions (Krahn, Lowe and Hughes, 62). The primary and secondary labour markets can also be described as primary and secondary economies, according to the dual economy model. The theory asserts that the power of the market lies in the hands of the economy that controls the market place by monopolizing it and producing an abundance of capital (Krahn, Lowe and Hughes, 134). Thus, the primary labour market controls the economy. This model states that the primary labour contains white collar, core jobs. These positions of employment return an investment in human capital, give competitive pay, allow advancement within the place of employment and are seen as white collar jobs. The secondary labour market holds the periphery jobs which are vital to the success of an organization, however, have a depreciated value and are seen as blue collar or factory jobs. There is rarely opportunity for advancement in the secondary labour market, either within the company or to the primary labour market. An industry which exemplifies both secondary and primary labour markets, as well as core and periphery jobs, is the fast food industry. There is a high degree of labour market segmentation in the fast food industry due to segmentation of primary and secondary labour markets into core and periphery jobs. Thus, causing inequality by creating an “operational hierarchy”, which a greater level of alienation in periphery jobs than core jobs, and a greater access to internal markets from the primary labour market than the secondary labour market (Gordon, 1995).
Labour market segmentation has caused inequality through the creation of a hierarchy of power in the fast food industry (Gordon, 1995). The industry is first split into primary and secondary labour markets, the primary containing the white collar jobs and the secondary market containing the blue collar jobs as stated previously (Krahn, Lowe and Hughes, 134). However, primary and secondary labour markets are further segmented into core and periphery jobs, thus leading to primary periphery jobs and primary core jobs, as well as secondary core and periphery jobs.
The primary labour market consists of jobs which require skill and an investment in human capital. This market holds positions of employment that return an investment in human capital, offer competitive pay, allow advancement within the place of employment and are seen as white collar jobs (Krahn, Lowe and Hughes, 134). This market is further spilt into core and peripheral jobs; high status white collar and low status white collar jobs (Krahn, Lowe and Hughes, 122). An example of a core job in the primary labour market of the fast food industry is an executive position such as CEO.(Nelson) These positions offer the highest pay, highest return in human capital investment, highest status and are the least labour intensive jobs in the hierarchy (Gordon, 1995). An executive at a fast food company is not required to work from a detailed list of instructions, specifications or rules to complete their daily tasks and is able to express creativity and become involved with the process of their work. Due to their ability to express creativity they still remain connected to the process and the essence of their work and thus do not suffer from alienation to the extent that individuals in other areas of the industry do (Rinehart, 2006). Also, the presence of internal labour markets allow for the opportunity to further develop a career and advance employment options (Krahn, Lowe and Hughes, 137). A clear difference between this group of jobs and others is that they have freedom and flexibility within their job and roles. The jobs in the primary core market set the standard for jobs in other labour market in the fast food industry. Therefore, any decision made on the executive level, effects all jobs below the top-tier of the hierarchy. For example, a marketing executive that has created a new add campaign for a new product will decide how employees in the secondary core labour markets will partake in the campaign; where ads will be placed in the restaurant locations. The power of the company is in the hands of a small amount executives of the company, thus making the placing the power of the company in the hands of the primary core labour market.
The primary labour market also contains periphery jobs. These primary market periphery jobs are second on the fast food employment hierarchy. They offer high status however are more labour intensive and their work and positions are outlined by executives and directors at the pinnacle of the hierarchy, decided by executives (Gordon, 1995). These jobs offer the security of the primary labour market however are periphery jobs in comparison to the executive roles in the industry. For example working in the marketing department of a fast food company in comparison to directing the marketing division of the company. This group of individuals are still able to express their creativity and remain attached to the process of their work; if they begin a project they will see it through to completion. Thus employees of this labour market do not feel strong effects of alienation (Rinehart, 2006). Although the jobs in this category are periphery jobs they are still a division of the primary market place, therefore causing the presence of internal labour markets and the chance for peripheral employees to become core employees through employment ladders (Parcel and Sickmeier, 1988).
The next level of the fast food employment hierarchy describes the secondary labour market. This labour market contains the jobs that are more labour intensive, require less of an investment in human capital and are based largely on instruction than skill (Krahn, Lowe and Hughes, 68). Essentially these are blue collar jobs. The secondary labour market is also further divided into core and periphery jobs. Core jobs in this market place have strictly outlined duties and responsibilities and are rarely allowed to express their creativity. It is at this point in the hierarchy that alienation becomes apparent. This is due to the fact that guidelines for duties and tasks are given to the employees in core jobs and that they have limited freedom and creativity in those positions. In essence they are detached from the process of their work and the fruits of their labour.
Subsequent to this at the bottom of the labour market and employment hierarchy are the secondary labour market periphery jobs. These jobs consist of specifically outlined duties and detailed descriptions of tasks, are not skill dependent and require no investment in human capital (Krahn, Lowe and Hughes, 122). These jobs allow no room for the employees creativity and create the highest level of alienation (Rinehart, 2006). The periphery jobs in the fast food industry are jobs which hold low status and depend on a specific list rules to complete a task rather than craftsmanship or intelligence, essentially scientific management to a lesser degree (Parcel and Sickmeier, 1988). Secondary periphery jobs in this industry are dependent on detailed procedures and rules rather than skill, an investment in human capital or craftsmanship. According to Parcel and Sickmeier, work in the periphery labour market remains increasingly labour intensive. These jobs are held by individuals who work in the fast food franchises and are involved in the production of food (Parcel and Sickmeier, 1988). Individuals that work in primary agricultural industries and are employed by fast food companies to grow produce and raise livestock are also considered members of the periphery labour market as they are vital part of the fast food industry and hold labour intensive positions of employment. This group of employees faces the most alienation as their creativity is completely repressed and they follow a strict set of guidelines and rules to complete simple tasks (Rinehart, 2006). This group is subject to the most inequality in the fast food industry.
This hierarchy clearly demonstrates the effects of labour market segmentation and causes inequality between different areas of the labour and employment hierarchy (Gordon, 1995). This is due to the fact that jobs in the primary core allow for more freedom and flexibility than any other jobs in the fast food industry (Parcel and Sickmeier, 1988). Individuals in these jobs decide the roles of other jobs in the industry have the highest pay and are allowed to exercise the most creativity in comparison other jobs in the fast food industry. Primary core and primary periphery employees do not suffer from alienation to the extent that the secondary periphery employees suffer from alienation. In addition to this inequality is evident since every level of the hierarchy is expected to adhere to a different standard of work and has to address a different set of consequences if the standards are not met. In conclusion labour market segmentation causes inequality due to different expectations, roles, and standards for each type of job in the fast food industry. Labour market segmentation will be exhibited to a high degree in the fast food industry because of the capitalistic nature of the industry and need for segmentation of labour to ensure that the fast food industry operates in an efficient and profitable manor.
Bibliography
Brown, D.M. (1990). The restaurant and fast food race: Who’s winning?. Southern Economic Journal, 56(4), 984-995.
Gordon, I. (1995). Migration in a Segmented Labour Market. Transactions of the institute of British Geographers. 20, 139-155.
Krahn, H.J., Lowe, G.S., & Hughes, K.D. (2007). Work, industry & Canadian society (5th ed.). Toronto: Thomson Canada Limited.
Parcel, T., Sickmeier, B. (1988). One Firm, Two Labor Markets: The Case of McDonald's in the Fast-Food Industry. The Sociological Quarterly. 29, 29-46.
Rinehart, J.W. (2006). The tyranny of work: Alienation and the labour process (5th ed.). Toronto: Thomson Canada Limited.
The fast food industry has become increasingly popular due to the convenience and time efficient meal options that it provides. In 1986 there were 126, 125 fast food establishments in the United States of America and that number has certainly increased (Brown, 1990). Therefore it is no surprise that the fast food industry employs many individuals in various sectors in order to succeed in a capitalistic economy and that segmentation of employees into different markets of jobs is necessary (Parcel and Sickmeier, 1988). Labour market segmentation is the idea that society does not contain a single, open market into which everyone is allowed equal entry, based on the human capital theory.(Nelson) However it hypothesizes that the labour market contains a primary market, containing the good jobs and a secondary labour market containing the bad jobs (Krahn, Lowe and Hughes, 133). Individuals are given preferential entry into labour markets based on factors independent of just their human capital, such as gender, ethnicity and availability of jobs. An example being that women, youth and foreigners are commonly given entry into secondary labour markets which hold poor quality jobs with low chances of advancement to higher quality positions (Krahn, Lowe and Hughes, 62). The primary and secondary labour markets can also be described as primary and secondary economies, according to the dual economy model. The theory asserts that the power of the market lies in the hands of the economy that controls the market place by monopolizing it and producing an abundance of capital (Krahn, Lowe and Hughes, 134). Thus, the primary labour market controls the economy. This model states that the primary labour contains white collar, core jobs. These positions of employment return an investment in human capital, give competitive pay, allow advancement within the place of employment and are seen as white collar jobs. The secondary labour market holds the periphery jobs which are vital to the success of an organization, however, have a depreciated value and are seen as blue collar or factory jobs. There is rarely opportunity for advancement in the secondary labour market, either within the company or to the primary labour market. An industry which exemplifies both secondary and primary labour markets, as well as core and periphery jobs, is the fast food industry. There is a high degree of labour market segmentation in the fast food industry due to segmentation of primary and secondary labour markets into core and periphery jobs. Thus, causing inequality by creating an “operational hierarchy”, which a greater level of alienation in periphery jobs than core jobs, and a greater access to internal markets from the primary labour market than the secondary labour market (Gordon, 1995).
Labour market segmentation has caused inequality through the creation of a hierarchy of power in the fast food industry (Gordon, 1995). The industry is first split into primary and secondary labour markets, the primary containing the white collar jobs and the secondary market containing the blue collar jobs as stated previously (Krahn, Lowe and Hughes, 134). However, primary and secondary labour markets are further segmented into core and periphery jobs, thus leading to primary periphery jobs and primary core jobs, as well as secondary core and periphery jobs.
The primary labour market consists of jobs which require skill and an investment in human capital. This market holds positions of employment that return an investment in human capital, offer competitive pay, allow advancement within the place of employment and are seen as white collar jobs (Krahn, Lowe and Hughes, 134). This market is further spilt into core and peripheral jobs; high status white collar and low status white collar jobs (Krahn, Lowe and Hughes, 122). An example of a core job in the primary labour market of the fast food industry is an executive position such as CEO.(Nelson) These positions offer the highest pay, highest return in human capital investment, highest status and are the least labour intensive jobs in the hierarchy (Gordon, 1995). An executive at a fast food company is not required to work from a detailed list of instructions, specifications or rules to complete their daily tasks and is able to express creativity and become involved with the process of their work. Due to their ability to express creativity they still remain connected to the process and the essence of their work and thus do not suffer from alienation to the extent that individuals in other areas of the industry do (Rinehart, 2006). Also, the presence of internal labour markets allow for the opportunity to further develop a career and advance employment options (Krahn, Lowe and Hughes, 137). A clear difference between this group of jobs and others is that they have freedom and flexibility within their job and roles. The jobs in the primary core market set the standard for jobs in other labour market in the fast food industry. Therefore, any decision made on the executive level, effects all jobs below the top-tier of the hierarchy. For example, a marketing executive that has created a new add campaign for a new product will decide how employees in the secondary core labour markets will partake in the campaign; where ads will be placed in the restaurant locations. The power of the company is in the hands of a small amount executives of the company, thus making the placing the power of the company in the hands of the primary core labour market.
The primary labour market also contains periphery jobs. These primary market periphery jobs are second on the fast food employment hierarchy. They offer high status however are more labour intensive and their work and positions are outlined by executives and directors at the pinnacle of the hierarchy, decided by executives (Gordon, 1995). These jobs offer the security of the primary labour market however are periphery jobs in comparison to the executive roles in the industry. For example working in the marketing department of a fast food company in comparison to directing the marketing division of the company. This group of individuals are still able to express their creativity and remain attached to the process of their work; if they begin a project they will see it through to completion. Thus employees of this labour market do not feel strong effects of alienation (Rinehart, 2006). Although the jobs in this category are periphery jobs they are still a division of the primary market place, therefore causing the presence of internal labour markets and the chance for peripheral employees to become core employees through employment ladders (Parcel and Sickmeier, 1988).
The next level of the fast food employment hierarchy describes the secondary labour market. This labour market contains the jobs that are more labour intensive, require less of an investment in human capital and are based largely on instruction than skill (Krahn, Lowe and Hughes, 68). Essentially these are blue collar jobs. The secondary labour market is also further divided into core and periphery jobs. Core jobs in this market place have strictly outlined duties and responsibilities and are rarely allowed to express their creativity. It is at this point in the hierarchy that alienation becomes apparent. This is due to the fact that guidelines for duties and tasks are given to the employees in core jobs and that they have limited freedom and creativity in those positions. In essence they are detached from the process of their work and the fruits of their labour.
Subsequent to this at the bottom of the labour market and employment hierarchy are the secondary labour market periphery jobs. These jobs consist of specifically outlined duties and detailed descriptions of tasks, are not skill dependent and require no investment in human capital (Krahn, Lowe and Hughes, 122). These jobs allow no room for the employees creativity and create the highest level of alienation (Rinehart, 2006). The periphery jobs in the fast food industry are jobs which hold low status and depend on a specific list rules to complete a task rather than craftsmanship or intelligence, essentially scientific management to a lesser degree (Parcel and Sickmeier, 1988). Secondary periphery jobs in this industry are dependent on detailed procedures and rules rather than skill, an investment in human capital or craftsmanship. According to Parcel and Sickmeier, work in the periphery labour market remains increasingly labour intensive. These jobs are held by individuals who work in the fast food franchises and are involved in the production of food (Parcel and Sickmeier, 1988). Individuals that work in primary agricultural industries and are employed by fast food companies to grow produce and raise livestock are also considered members of the periphery labour market as they are vital part of the fast food industry and hold labour intensive positions of employment. This group of employees faces the most alienation as their creativity is completely repressed and they follow a strict set of guidelines and rules to complete simple tasks (Rinehart, 2006). This group is subject to the most inequality in the fast food industry.
This hierarchy clearly demonstrates the effects of labour market segmentation and causes inequality between different areas of the labour and employment hierarchy (Gordon, 1995). This is due to the fact that jobs in the primary core allow for more freedom and flexibility than any other jobs in the fast food industry (Parcel and Sickmeier, 1988). Individuals in these jobs decide the roles of other jobs in the industry have the highest pay and are allowed to exercise the most creativity in comparison other jobs in the fast food industry. Primary core and primary periphery employees do not suffer from alienation to the extent that the secondary periphery employees suffer from alienation. In addition to this inequality is evident since every level of the hierarchy is expected to adhere to a different standard of work and has to address a different set of consequences if the standards are not met. In conclusion labour market segmentation causes inequality due to different expectations, roles, and standards for each type of job in the fast food industry. Labour market segmentation will be exhibited to a high degree in the fast food industry because of the capitalistic nature of the industry and need for segmentation of labour to ensure that the fast food industry operates in an efficient and profitable manor.
Bibliography
Brown, D.M. (1990). The restaurant and fast food race: Who’s winning?. Southern Economic Journal, 56(4), 984-995.
Gordon, I. (1995). Migration in a Segmented Labour Market. Transactions of the institute of British Geographers. 20, 139-155.
Krahn, H.J., Lowe, G.S., & Hughes, K.D. (2007). Work, industry & Canadian society (5th ed.). Toronto: Thomson Canada Limited.
Parcel, T., Sickmeier, B. (1988). One Firm, Two Labor Markets: The Case of McDonald's in the Fast-Food Industry. The Sociological Quarterly. 29, 29-46.
Rinehart, J.W. (2006). The tyranny of work: Alienation and the labour process (5th ed.). Toronto: Thomson Canada Limited.
Dunbar, Jon . "Food & Beverage - Market Segmentation - Service Style - By Joe Dunbar." Restaurant News Resource 10 APR 2007 3 Feb 2009 <http://www.restaurantnewsresource.com/article27053 Food__amp__Beverage___Market_Segmentation___Service_Style___By_Joe_Dunbar.html>
Nelson, Charlie. "Market Segmentation." For See Change. AUG 2001. 2 Feb 2009 <http://www.foreseechange.com/mktseg.htm>.